As January 1 passes each year, the general public tends to examine itself and take steps toward making the new year more profitable, healthy or happy than the previous one.
A resolution many ignore is the reinvention of one’s retirement plan in light of the current environment.
With 10,000 baby boomers retiring each day according to LIMRA (a life insurance and marketing association), the need for a re-evaluation is more important than ever before. Government programs, the default for those who are inadequately prepared, are becoming ever more bogged down by the influx of retirees.
Many of these pre-retirees believe a simple shift in investment strategy is enough to support their retirement. Though it is possible to make this work in certain circumstances, it is important to consider the risks involved. Retirement is a one-way street; once assets are used they are almost impossible to replenish. Consider the following:
According to the Social Security Administration (2007), in the days of secure Social Security and company pensions, the average worker retired at 65 and passed away before 70. Now many Americans are expected to live longer in retirement than in their working years. The SSA in 2012 calculates that there’s a 50 percent chance that one of a married couple will be alive well into their 90s.
Companies are moving away from providing traditional pensions and retirement benefits, and individuals are needing to rely on their own assets to last through retirement.
More than ever, the increasing life expectancy is resulting in large numbers of elderly receiving care. Many receive care from their families with little fanfare, but the costs can create a huge social drain. Additionally, the costs of extended periods of care are increasing rapidly.
The risks to retirement in this country are not to be underestimated; however, a thorough review with a professional can help. Many who have worked for years with these professionals can turn to them for a strategy; others may need to seek a second opinion or perhaps a first one.
Either way, the retirement picture today is not what it was 30 years ago and it is vital to plan as such.